SAMPLE EXAM QUESTIONS
The following test questions are from a Business Ethics
class that is no longer taught at UTM, and are based
on the book Business Ethics by Robert
Hartley. These sample questions are made available here only as an example of
how I construct tests. None of these specific
questions will appear on any of my current tests, including those from the
Philosophy 160 Ethics course.
(1) Which of the following is NOT part of the story of ITT's
operations in
a. ITT aided the
CIA in attempting to stop Allende's election
b. Allende was eventually killed in a military overthrow
c. Chilean
government nationalized all American companies in
d. ITT had a
reputation for doing what was necessary to achieve profits
(2) "The efforts of an interest group to influence
government in its behalf" is the definition of
a. socialism
b. economic imperialism
c. lobbying
d. supply side economics
(3) In the chapter on the Lockheed Corporation and overseas
bribery, Hartley argues that overseas corporations can reduce the need for
bribery by
a. imposing a
b. contribute to the campaigns of politicians in the
overseas country
c. having both production and distribution facilities in the
overseas country
d. paying protection money to the Mafia organizations in the
overseas country
(4) The
a. the view that government should intervene as little as
possible in the direction of economic affairs
b. the practical implications of job losses
c. Stalinist-type
communist ideology
d. the laissez faire (hands off) approach to economics
(5) Which of the following is NOT part of the Nestles'
infant formula story
a. poor parents would dilute the infant formula with
contaminated water
b. consumer groups boycotted Nestle
c. Nestle shifts
to selling infant formula in developing countries because sales drop in
developed countries
d. all of the formula shipped to developing countries was
old unused stock from developed countries which became contaminated in storage
(5) Which of the following is NOT one of Nestles’ marketing
strategies of the infant formula
a. formulas came with savings stamp bonuses
b. use of milk nurses
c. promoted product to health care officials
d. free samples
(6) Which of the following is one of the demands made by the
Infant Formula Action Coalition against Nestle
a. recall all contaminated samples of infant formula sold
world-wide
b. stop distributing free samples in developing countries
c. stop all production of infant formula world-wide
d. stop all sales of infant formula in developing countries
(7) A missionary sales person (or detail person) is a sales
person who
a. acquires details about the lives of every consumer who
uses a given product
b. goes around leaving samples
c. sells a product as an act of charity, without any
financial compensation
d. promotes a religious ideology when selling a product
(8) Which of the following is NOT part of Union Carbide's
a. the chemical released was an active ingredient in
pesticides
b. toxic gasses were released from the plant at least in
part because safety features had been shut off
c. the Indian government itself spent several million
dollars in disaster relief programs for the victims
d. Union Carbide factories in
(9) Which of the following is NOT one of the consequences of
the
a. Union Carbide did not have to pay money to the surviving
victims
b. Union Carbide chairman was arrested upon his arrival in
c. American
lawyers tried to file claims on behalf of victims
d. Indian
government arrested plant managers
(10) In determining who is responsible for worker competence
in third world countries, Hartley notes two possible sources. One is that the
company has a responsibility to train employees. Another possible source
maintained by critics is that
a. a world organization such as the United Nations is
responsible to assure that education world-wide is equitable
b. the
c. the worker him/herself has a responsibility to become
properly educated
d. the foreign government has the responsibility to properly
educate the workers
(11) In the chapter on Union Carbide, which
of the following is one of the flawed incentives for building plants in
less-developed countries
a. to benefit from less strict safety regulations
b. to set up in a location which is closer to already
established points of sale
c. to set up in a location which is closer to raw materials
d. to expanding a business's global market
(12) In the chapter on assorted abusive business practices,
the practice of secretly adding additional services for additional costs
associated with
a. small loan companies
b. automobile repair companies
c. health clubs
d. small appliance repair companies
(13) Consider the following: a company sells a credit note
to a third party whereby the original creditor has to pay the third party
regardless of his satisfaction with the purchase. This circumstance is called
a. bait and switch
b. loss leader
c. holder in due course
d. packing
(14) Consider the following: a company gives a loan but
sometimes adds on insurance without the customer knowing it. This practice is
called
a. bait and switch
b. loss leader
c. holder in due course
d. packing
(15) According to Hartley, the Corvair
flipped because
a. there was a design flaw with the stability of the wheels
b. they were all purchased by stunt men
c. the car would explode upon rear impact
d. only poor drivers operated Corvairs
(16) Which of the following was NOT one of the consequences
of the Corvair controversy
a. increased governmental regulation
b. Nader jailed for slandering GM
c. Traffic Safety
Act proposed by Johnson
d. decreased sales of the Corvair
(17) The issue of whistle blowing involves a conflict
between
a. the rights of the stockholder vs. the rights of managers
b. the limited authority of middle managers vs. the broad
authority of executive managers
c. marketing vs. public relations
d. loyalty to one's company vs. loyalty to the public
(18) According to Hartley, the last period of consumerism
started in the mid 1960s, and was prompted by Nader's
book Unsafe at Any Speed. Hartley argues that this period of consumerism
a. is still going on
b. was part of the communist conspiracy of the cold war
c. resulted in a decrease of governmental regulation
d. ended in the early 1970s
(19) Which of the following is NOT one the events in the
Union Carbide assault on the
a. increased governmental regulation (e.g. EPA)
b. Union Carbide laid off workers, claiming that was the
only way they could comply
c. to this day, Union Carbide has not improved its pollution
standards
d. pollution of the region resulted in respiratory diseases
in the local population
(20) According to Hartley, we cannot apply a cost-benefit
analysis to implementing pollution control measures since,
a. there is always a short term financial benefit to these
measures, and factoring in this benefit would put that company in an unfair financial
advantage
b. we cannot measure the benefit of a clean environment
c. accountants are not typically trained in assessing the
costs of polution control devices
d. EPA
regulations make such an analysis illegal
(21) In the story of General Dynamics overcharging the
government for military contracts, Hartley discusses the issue of management
change, and whether it can salvage a tainted corporate image. According to
Hartley, the reception of General Dynamics's new
chairman at a National press club luncheon shows that
a. the press have little effect on the image of a
corporation
b. the press favorably accepts pronouncements of new ethical
policies by new chairs
c. replacing an old chairman is the only thing which will
appease the press
d. the press will remain skeptical about announced changes
in ethical policy
(22) In the chapter on the Alaskan Oil Spill, which of the following is NOT one of the reasons cited by Hartley
for why the oil spill happened
a. a budget radar unit was installed
b. it happened during a time of heavy deregulation by the
Reagan administration
c. a heavier grade of oil was being transported
d. over the past few decades, there was a general
complacency (or agreeability) on the part of the oil companies and local
government
(23) According to Hartley, a corporation is morally (as
opposed to legally) responsible for an accident
a. if the courts determine that a corporation must pay fines
or some kind of accident compensation
b. if the C.E.O or another high
level official in the corporation gets fired as a result
c. if most people would put the blame on that corporation
d. if it was careless, negligent, or used bad judgment
(24) According to Hartley, what is the dilemma with using
double hulled tankers
a. once on the open seas, the tanker can remove the second
hull, and thus defeat its purpose
b. once oil is put into double hulled tankers, it can never
be taken out until the vessel is dismantled
c. double hulled tankers are more safe, but hold less oil
and thus require more sea traffic
d. double hulled tankers are less likely to be punctured,
but are heavier and more likely to sink
(25) In his analysis of the savings and loan disaster,
Hartley argues that
a. the lending policies of S&Ls
during that period was actually conservative; the overall bad economy of the
early 80s is why they failed
b. the S&Ls were run out of
business by the banking industry, which perceived the S&Ls
as a threat
c. S&Ls could have used more traditional lending
strategies and still been successful
d. S&Ls would have gone out of business much sooner if
they didn't gamble on nontraditional loans
(26) In the chapter on the savings and loan disaster,
Hartley discusses the notion of a corporate mission statement. Which of the following is NOT part of the nature of a mission
statement
a. should not be to narrow
b. should not be too broad
c. it determines what business a firm should be in at a
given time
d. should be as all encompassing as possible to allow for
any and all business opportunities
(27) In the chapter on corporate raiders, the notion of
synergy is defined as
a. the creation of a whole that is greater than the sum of
its parts
b. the creation of a whole becomes less than the sum of its
parts
c. synthetically produced electricity from petroleum based
products
d. the gap between the total assets of a company and its
market value
(28) In the chapter on corporate raiders, Hartley discusses
the notion of the transferability of management skills. He concludes that
a. management skills are indeed transferrable
from one industry to another
b. no management skills are transferable from one industry
to another
c. there is no such thing as a management skill: it is all a
matter of luck
d. Campeau's story suggests that there are limits to the
transferability of management skills from one industry to another
(29) According to
Hartley, the Corvair flipped because
a. there was a design flaw with the stability of the wheels
b. they were all purchased by stunt men
c. the car would explode upon rear impact
d. only poor drivers operated Corvairs
(30) Which of the following was NOT one of the consequences
of the Corvair controversy
a. increased governmental regulation
b. Nader jailed for slandering GM
c. Traffic Safety
Act proposed by Johnson
d. decreased sales of the Corvair
(31) The issue of whistle blowing involves a conflict
between
a. the rights of the stockholder vs. the rights of managers
b. the limited authority of middle managers vs. the broad
authority of executive managers
c. marketing vs. public relations
d. loyalty to one's company vs. loyalty to the public
(32) According to Hartley, the last period of consumerism
started in the mid 1960s, and was prompted by Nader's
book Unsafe at Any Speed. Hartley argues that this period of consumerism
a. is still going on
b. was part of the communist conspiracy of the cold war
c. resulted in a decrease of governmental regulation
d. ended in the early 1970s
(33) Which of the following is NOT part of the STP story
a. Consumer Reports article attacked the claims of STP
b. the STP logo was a key part of
its advertising strategy
c. STP was required to perform corrective advertising
d. STP contains an acid which over time dissolves engine parts
(34) A "membership group" is a group that a
consumer
a. actually belongs to
b. must pay fees to in order to join
c. is nominated into by someone in a reference group
d. admires or identifies with
(35) Which of the following is NOT part of the electrical
equipment price fixing conspiracy
a. smaller electrical companies were not allowed to participate
in the conspiracy
b. the convicted conspirators were middle management level
c. the incentive behind the conspiracy was to increase
profits after WWII restrictions
d. it involved electrical equipment
(36) Price fixing is a violation of what kind of laws
a. anti-discrimination laws
b. laws against insider trading
c. fairness in advertising laws
d. anti-trust laws
(37) In the story of General Dynamics overcharging the
government for military contracts, Hartley discusses the issue of management
change, and whether it can salvage a tainted corporate image. According to
Hartley, the reception of General Dynamics's new
chairman at a National press club luncheon shows that
a. the press have little effect on the image of a
corporation
b. the press favorably accepts pronouncements of new ethical
policies by new chairs
c. replacing an old chairman is the only thing which will
appease the press
d. the press will remain skeptical about announced changes
in ethical policy
(38) Which of the following is NOT part of the story of the Dalkon Shield
a. by the early 80s, more than 4,000 law suits against A.H.
Robins were still pending
b. A.H. Robins filed for bankruptcy in the mid 80s in an
attempt to block further suits
c. once A.H. Robins was sold, no more financial compensation
was given to those who filed suits
d. it was invented by a professor of gynecology at
(39) In the Dalkon Shield chapter,
Hartley considers when a company is morally responsible for the long term
negative effects of a product. He concludes that
a. a firm is not morally responsible for a harmful product
when they do thorough testing and there are no signs that a product is
dangerous
b. all moral responsibility rests with the government which establishes safety
regulations
c. all moral responsibility rests with the consumer who is
responsible for investigating a product's safety him/herself
d. a firm is morally responsible for a harmful product even
if they did thorough testing and there were no signs that a product was dangerous
(40) Which of the following is NOT part of the Beech-Nut
adulterated apple juice story
a. at one point, beet juice was the key sweetening
ingredient used in the apple juice concentrate
b. Beech Nut
delayed in recalling the product in an attempt to use up several million
dollars of inventory
c. Beech Nut
itself manufactured the artificial apple juice concentrate which it used in its
apple juice for babies
d. in its defense, Beech-Nut maintained that there wasn't
positive proof that the concentrate was adulterated
(41) In the Beech-Nut chapter, Hartley discusses three
possible options open to middle managers who recognize that their company is
engaged in immoral activity. Which of the following is NOT
one of those options
a. resign
b. be a whistleblower
c. accept the situation
d. stage a labor union walk out
(42) Critics maintain that current punishment for white
collar crime is not strict enough since
a. the leniency given to white collar criminals is based on
class prejudice
b. because of benefits packages, punishment for white collar
crime becomes a paid vacation for the criminal
c. white collar jobs come with more responsibility and thus
require greater accountability
d. white collar criminals are also the ones who commit
violent crimes, such as rape and murder
(43) A classic defense of questionable conduct is that
"the ends justify the means." In the chapter on Beech-Nut, Hartley
rejects this defense since
a. no one's ultimate ends (or goals) can be clearly
articulated
b. there is always a moral course of action which will yield
precisely the same end
c. sometimes the means justifies the ends
d. it will always involve a compromise of moral principles
(44) In the chapter on pharmaceutical companies, which of
the following was Burroughs's justification for pricing AZT so high?
a. since the AIDS patients would die soon in any case, it
didn't matter if they drained their bank accounts
b. several Burroughs workers contracted AIDS in the testing
process, and thus created more overhead
c. it was initially for a restricted market
d. the government intended to purchase the drug for AIDS
patients from a public fund
(45) In the chapter on pharmaceutical companies, Hartley
discusses the policy of subsidizing poor selling drugs with high profits from
well selling drugs. He concludes from this discussion that
a. this form of subsidizing should always be done
b. the critical issue is determining how high the successful
drug's profit margin should be
c. the government should pay for drugs which are not
economically viable
d. this form of subsidizing should never be done
(46) In the chapter on pharmaceutical companies, Hartley
discusses the notion of transfer pricing. Which of the following is an example
of transfer pricing?
a. selling a product to a charitable organization at a
reduced rate
b. selling a product to one of its overseas subsidiaries
which will then resell it at a tax savings
c. changing the price of a product so that it is the same as
a competing product
d. increasing the sticker price on an item to take into
account inflation while the product is on the shelf
(47) In the chapter on silicone breast implants, Hartley
argues that one of the primary immoral things done by Dow Corning was to
a. make the implants smaller than their clients actually
wanted
b. use a thinner plastic sack to hold the silicone which
saved money
c. suppress incriminating documents
d. consciously use an impure but cheaper grade of silicone
in the implants
(48) Hartley discusses whether product law suits against
companies are getting out of hand. Defenders of such suits argue that
a. law suits can be a strong deterrent to corporate
recklessness
b. given the overabundance of lawyers in this country, such
law suits are the only way that some lawyers can make a living
c. all of the money won in a law suit is taxable, thus
society as a whole benefits
d. if they don't sue, someone else will
(49) Which of the following is NOT a typical example of
governmental paternalism
a. prohibiting dangerous sports
b. motorcycle helmet regulations
c. allowing people to go bankrupt
d. requiring seat belts
(50) In the Chapter on Powermaster
Beer, which of the following is NOT one of the key moral
issues discussed by Hartley
a. whether the name "Powermaster
Beer" is offensive and unethical
b. whether drinking is unethical
c. whether the target marketing technique of Powermaster Beer is unethical
d. whether it is unethical to sell strong beer